Target Stock: Analysts Bullish Ahead of Earnings

Target Corporation (TGT) is set to report its third-quarter earnings on Wednesday, November 20, 2024, and analysts are bullish on the retailer's stock. With a strong focus on profitability and operational efficiency, target has been able to maintain its earnings momentum despite ongoing challenges with sales and traffic declines due to economic pressures on consumers.

Analysts' Price Targets and Ratings
Analysts' price targets and ratings for Target stock reflect their confidence in the company's short-term and long-term prospects. As of March 11, 2025, the average price target for Target stock is $159.45, which suggests an increase of 28.34% from the current stock price of $124.24. This indicates that analysts expect the stock to perform well in the short term. Additionally, the average analyst rating for Target stock is "Buy," which further supports the notion that analysts are confident in the company's short-term prospects. Looking at the long-term prospects, analysts expect Target's revenue to grow by 2.54% in the next year, and its EPS to increase by 7.16%. These projections suggest that analysts are optimistic about Target's long-term growth potential.

Key Financial Metrics and Trends
Analysts are focusing on several key financial metrics and trends when evaluating Target's earnings potential, including:

1. Revenue Growth: Analysts are closely monitoring Target's revenue growth, which has been volatile in recent quarters. In the third quarter of 2024, Target reported a 4.9% decline in comparable sales, which was in line with expectations. However, analysts are looking for signs of improvement in this metric, as it directly impacts the company's top-line growth.
2. Earnings per Share (EPS): EPS is a crucial metric for evaluating a company's profitability. In the third quarter of 2024, Target reported an EPS of $2.10, which was a 36% increase from the previous year. Analysts are focusing on the company's ability to maintain and grow its EPS, as it indicates the company's profitability and potential for future growth.
3. Inventory Management: Effective inventory management is essential for retailers like Target. In the third quarter of 2024, Target reported a 14% decrease in total inventory and a 19% decrease in discretionary category inventory compared to the previous year. This disciplined approach to inventory management helps the company maintain profitability and avoid excess stock.
4. Operational Efficiency: Analysts are also evaluating Target's operational efficiency, as measured by metrics like in-stock rates and supply chain performance. In the third quarter of 2024, Target reported significant improvements in in-stock metrics, with overall in-stock rates improving nearly 1 percentage point compared to the second quarter and more than 3 percentage points from the previous year.
5. Beauty Segment Performance: The Beauty segment has been a strong performer for Target, with comparable sales growth in the high single digits driven by core Beauty and Ulta Beauty at Target offerings. Analysts are focusing on the continued growth and performance of this segment, as it contributes significantly to the company's overall earnings potential.
6. Guidance: Analysts are also evaluating Target's guidance for future quarters and the full year. In the third quarter of 2024, Target maintained its guidance for a mid-single-digit decline in fourth-quarter comparable sales and an EPS range of $1.90 to $2.60. Analysts are looking for consistency and realism in the company's guidance, as it provides insights into management's expectations for future performance.

Analysts' Expectations Align with Retail Sector Performance and Consumer Spending Trends
Analysts' expectations for Target's earnings growth align with the broader retail sector's performance and consumer spending trends. The average analyst rating for Target stock from 31 stock analysts is "Buy," indicating that analysts believe this stock is likely to outperform the market over the next twelve months. This consensus suggests that analysts are optimistic about Target's earnings growth prospects. Additionally, the average price target of just under $145 suggests about 18% upside to Friday's close and would put the stock back at late-January levels. This indicates that analysts expect Target's stock price to increase, which is typically associated with earnings growth.



In conclusion, analysts' expectations for Target's earnings growth align with the broader retail sector's performance and consumer spending trends. While Target's earnings growth may not be as robust as in previous years, the company's earnings growth expectations are in line with the broader retail sector's performance and consumer spending trends. As Target reports its third-quarter earnings on Wednesday, November 20, 2024, investors will be closely watching the company's performance and the guidance provided by management.